Navigating the complex landscape of global health care deals in recent times, Sullivan & Cromwell has managed to retain its top spot from 2022. The law firm led in this expansive field with over $55.7 billion worth of deals this year, thereby underlining the sector’s consistent performance relative to the overall transactional market (Bloomberg Law).
Trailing only slightly behind S&C was Kirkland & Ellis, noted for handling deals valuing at $52.5 billion. Wachtell, Lipton, Rosen & Katz was the third law firm guiding transactions adding up to $50.2 billion. Reflecting on the regulatory aspects and future potential of the industry, Matthew Hurd, a S&C partner in health and life sciences, spoke optimistically about expectations for another strong performance in 2024.
Even though the total value of announced deals this year fell by 16% from 2022, to $314.1 billion, the sector still emerged as a bright spot. Comparatively, companies wielding robust cash reserves managed to execute $365 billion worth of deals in 2022. Notably, S&C’s $55.7 billion consisted of 14 deals, including their role in advising Seagen Inc. on its monumental acquisition by Pfizer Inc. ($43 billion).
Financial strength, particularly the availability of cash, played a critical role in facilitating deal-making, as it helped acquirers circumvent high borrowing costs that often hamper private equity activity. This positioned them to act swiftly, and in some cases, secure potential targets before their rivals. It was also interesting to note that larger companies had an edge this year, being less reliant on the somewhat sluggish venture capital market for their financing needs.
Despite the broad optimism, there were also companies that faced challenges, some of which necessitated workforce reductions. Yet the hope is for a better year ahead. An example of a determined acquirer was Pfizer, which aimed to add $25 billion in revenue through mergers and acquisitions by the end of 2023. As reported, the pharma giant has almost reached this goal (Bloomberg Law).
Looking forward, legal industry professionals anticipate an upswing in deal volume in 2024. However, regulatory hurdles might pose the largest obstacle for firms desiring to enter into deals. The prevalent view of the current administration that ‘big is bad’ is lending a more critical eye toward numerous transactions and possibly infusing hesitance among boards regarding potential deals.
In conclusion, while Sullivan & Cromwell’s performance offers an inspiring narrative of a boon in worldwide health deals, the road ahead is not without its barriers. However, the collective optimism in the industry promises an interesting year ahead, filled with new opportunities for growth and consolidation.